Driving outside your fleet insurance policy terms

Out-of-hours driving is not automatically uninsured

There is an important distinction to make here.

Driving a fleet vehicle outside normal working hours does not automatically mean it is uninsured. What matters is whether the driver, vehicle, journey and type of use are covered by your fleet insurance policy terms.

Some fleet insurance policies allow authorised drivers to use company vehicles at any time. Others may restrict:

• Who is permitted to drive
• Whether commuting or private use is allowed
• The purposes for which the vehicle can be used
• The geographical area covered
• The types of goods or equipment that can be carried
• Where the vehicle must be kept overnight
• Use outside agreed operating hours

Every fleet insurance policy is different, so businesses should check the wording carefully and speak to their insurer or broker if anything is unclear.

If a driver uses a company vehicle in a way that falls outside the agreed fleet insurance policy terms, the business could experience serious complications when making a claim.

The purpose of the journey matters

It is not simply the time of day that determines whether a journey is covered by fleet insurance.

A customer visit at eight o’clock in the evening is still a business journey. Equally, using a company van for an unauthorised personal trip on a Sunday morning is still private use.

The actual purpose of the journey must be covered by your fleet insurance policy terms.

This is why fleet managers need a clear understanding of how their vehicles are being used. If your fleet insurance only allows vehicles to be used for authorised business purposes, an unapproved personal journey could fall outside the agreed cover.

It is also important to make sure the insurer has an accurate picture of your fleet’s normal activities. If drivers regularly work during evenings or weekends, attend emergency call-outs, travel across different regions or take vehicles home overnight, this should be discussed with your insurer or broker.

The Health and Safety Executive explains that employers must manage the risks faced by people who drive as part of their work. This applies whether the vehicle is owned by the business or the employee.

What could happen following an accident?

If an accident happens while a fleet vehicle is being used outside the fleet insurance policy terms, the consequences could extend well beyond a difficult conversation with the driver.

Depending on the policy wording, the nature of the breach and the circumstances of the accident, an insurer could:

• Refuse to pay for damage to the company vehicle
• Decline part of the claim
• Cancel or void the fleet insurance policy
• Seek to recover certain costs
• Increase future fleet insurance premiums
• Add tighter conditions to the policy
• Refuse to renew the business’s fleet insurance

The business could also face uninsured costs such as vehicle recovery, repairs, replacement vehicle hire, lost working time and damage to equipment or company property.

The exact outcome will depend on the individual circumstances and the wording of your fleet insurance policy. If you are unsure whether a particular type of vehicle use is covered, speak to your insurer or broker before allowing it.

Could the driver be treated as uninsured?

Potentially, yes.

A breach of a fleet insurance policy condition does not automatically mean that every driver will be prosecuted for driving without insurance. However, if there is no policy in force that appropriately covers the driver, vehicle or type of use, the driver could be treated as driving without valid insurance.

According to GOV.UK guidance on driving without insurance, the police can issue a £300 fixed penalty and six penalty points to somebody caught driving a vehicle without appropriate insurance.

If the case goes to court, the driver could receive an unlimited fine or be disqualified from driving. The police also have the power to seize the vehicle and, in certain circumstances, destroy it.

For somebody who relies on their driving licence for work, six points could have a major effect on their job. For the business, losing access to both a fleet vehicle and an experienced driver could cause significant disruption.

The risks go beyond fleet insurance

Unauthorised company vehicle use can create several other financial and operational problems, even if no accident occurs.

It could result in:

• Additional fuel costs
• Increased mileage and vehicle wear
• More frequent servicing and maintenance
• Reduced vehicle availability
• Parking fines and toll charges
• Greater exposure to accidents
• Unexpected breakdowns
• Reputational damage
• Questions about the company’s vehicle controls

There is also the duty-of-care side to consider. Businesses should have suitable procedures for managing everyone who drives for work, even when driving is only an occasional part of their role.

Put a clear vehicle-use policy in place

Drivers cannot be expected to follow rules that have never been properly explained.

A company vehicle-use policy should clearly state:

• Which drivers are authorised to use each vehicle
• The hours during which fleet vehicles may be used
• Whether commuting or personal use is permitted
• Any geographical restrictions
• Where vehicles must be parked overnight
• Whether family members or other employees may drive
• What drivers must do before making an exceptional journey
• How unauthorised company vehicle use will be investigated
• How telematics information may be used and monitored

Drivers should read and acknowledge the policy. Businesses should also provide regular reminders and ask drivers to accept updated terms whenever the rules change.

If your business does not already have a suitable vehicle-use policy, our Transport Consultancy partner can help you create and implement one that reflects how your fleet and drivers actually operate.

The policy should align with your fleet insurance terms. If business operations change, make sure both the company vehicle-use policy and the insurer’s understanding of the risk remain up to date.

Do not forget grey fleet drivers

Although fleet insurance is the main focus, businesses should not overlook grey fleet drivers.

Grey fleet drivers are employees who use their own vehicles for business journeys. These vehicles will not usually be covered by the company’s fleet insurance policy, so the employee must have personal insurance that includes the appropriate level of business use.

Businesses should regularly obtain evidence that grey fleet drivers have:

• A valid driving licence
• Insurance covering the appropriate type of business use
• A valid MOT where required
• Current vehicle tax
• A vehicle that is safe and suitable for the journey

An employee saying that their car is insured is not necessarily enough. Their insurance must cover the type of business journey they are being asked to undertake.

The Health and Safety Executive advises businesses to ensure that privately owned vehicles used for work are safe, insured and have a valid MOT where required. It also recommends having clear procedures for vehicle checks, maintenance and reporting defects. You can read the HSE guidance on vehicle safety at work for further information.

Fleetmaxx Solutions can also help through the CheckedSafe driving licence checking service. This gives businesses a straightforward way to check driving licences, monitor driver eligibility and identify important changes that could affect whether an employee should be driving for work.

These checks should form part of an ongoing grey fleet management process, rather than something completed only when an employee first joins the business.

How Fleetloc8 can identify unauthorised vehicle use

A clear vehicle-use policy and appropriate fleet insurance cover must come first. Telematics does not replace either of them.

What telematics can do is help you see whether your company vehicles are being used in line with the fleet insurance terms and vehicle-use rules you have established.

Fleetloc8 telematics from Fleetmaxx Solutions provides live vehicle tracking, journey history and configurable alerts. This gives fleet managers much better visibility of when and where their vehicles are moving.

Fleetloc8 can help businesses:

• Receive alerts when a fleet vehicle moves outside agreed working hours
• Review previous journeys and vehicle activity
• Identify unexplained evening or weekend journeys
• Monitor where vehicles are parked overnight
• Create geofences around depots or customer sites
• Set geographical boundaries around approved operating areas
• Receive alerts when a vehicle enters or leaves a geofenced area
• Investigate unexpected mileage or fuel consumption
• Maintain a clearer record of company vehicle movements

A geofence is a virtual boundary placed around a chosen location or geographical area. If a vehicle enters or leaves that boundary, the fleet manager can receive an alert.

This can be particularly useful when vehicles should remain within a local operating area, stay at a depot overnight or only travel to approved sites.

Visibility helps you act sooner

Most fleet managers do not want to spend every evening watching vehicles move around a map, and they should not have to.

Fleetloc8 alerts can draw attention to unusual activity, allowing the fleet manager to investigate it quickly.

There may be a perfectly reasonable explanation, such as an authorised emergency call-out or an approved change to the driver’s schedule. The important thing is having the information available to check.

If a fleet vehicle is being used without permission or outside agreed operating conditions, identifying the issue early could help prevent an accident, a fleet insurance dispute or an expensive operational problem further down the road.

Jamie Drummond – Fleetloc8, the Fleetmaxx tracking solution 

This article provides general information and does not constitute legal or insurance advice. Fleet insurance policies and individual circumstances differ, so always speak to your insurer or broker about your specific cover.